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In business, making profits is vital but it's not always the only
goal.

Just ask Tim Westergren,
the co-founder of the Oakland, Calif.-based online radio
platform Pandora. Not only does he want to build a lasting
company, but he also wants to help musicians to quit their day
jobs. After spending years touring the country in a beat-up van,
struggling to get people to attend his shows, he saw firsthand
the plight of the musician. "I want someone today to tell their
parents that they are joining a band, and I want them to say
'okay, that's a respectable middle class job,'" Westergren says.

Pandora can make that happen, says Westergren, before a packed
audience at SXSW Interactive, where he spoke about the goals and
challenges for his company in the coming years.

In the U.S., the average citizen listens to 15 hours of music per
week, and 80 percent of that time is spent listening to the radio
rather than purchased music, says Westergren. Despite that
statistic, he says radio is undergoing a sea change, from
traditional broadcast to web-based.

As it stands, traditional radio has problems. Radio tries to
please a wide audience with only one playlist. And despite its
ease of use, it's also not very inclusive to musicians, either
financially or as a level playing field. All of these problems
are fixed with internet radio, he says, adding that Pandora is at
the forefront of this change.

The cornerstone for Pandora has always been personalization,
favoring an individual stream for one individual listener. The
ability for a person to choose just the right Pandora radio
station is because of one massive, proprietary algorithm called
the Music Genome Project. Launched in 2000,
and still active today, the MGP is an enormous undertaking by
Pandora – individual songs are categorized with up to 400
unique attributes in categories like genre, melody, vocals and
instrumentation.

Currently on Pandora, there are 900,000 songs, 90,000 artists and
350 genres. There are more than 125 million registered listeners
and 2.4 billion stations, according to a spokeswoman. Pandora has
a 5.74 percent share of all radio listening, which grows to 15
percent among all 18 to 24 year-old listeners. "The numbers are
getting big," Westergren says.

What's more, the ubiquity of smartphones has shaken off the
notion of internet radio as only a desktop app. Pandora is now
available on over 500 devices and has 23 different automotive
partnerships.

But Pandora has had its share of issues with competition (ehem,
Spotify's
recent entrée into the U.S.), growth and international law. About
seven million international listeners had to be blocked when
Pandora switched from subscription-based to free. Westergren
wants those listeners back.

Right now, Pandora is only available in the U.S. and must
strictly abide by the Digital Millennium Copyright Act (pdf).
Westergren is happy to do so, he says, because this ensures
that all musicians (and labels, if applicable) get paid. In a
sense, he adds that the "artists are shareholders."

As Pandora gets bigger, so do ad sales, says Westergren. Every
week, 1,400 ad campaigns broadcast on Pandora, and advertisers
have the ability to target location, age, sex, listening
preferences and more. That benefits everybody -- the listeners,
the advertisers and, most importantly, all those musicians who
are right now struggling to make a living inside a tour van.

What is your business's other reason for
being? Let us know in the comments section.

Corrections & Amplifications: An
earlier version of this post misstated the number of Pandora's
registered users. It has 125 million.